Using the Blockchain as Infrastructure for the Online Commons

by Ben Pearson

March 12th, 2015

Many people have already commented on the benefits and problems of Bitcoin as a currency, but perhaps the most valuable aspect has been explored only minimally. The blockchain is at the core of Bitcoin and serves as a distributed ledger of all transactions that can validate the authenticity of each individual Bitcoin without relying on a central authority. This tool has immense value as the basis for open networks. Bits of information like electronic documents, certificates, or digital identities can be verified using this protocol. This means it can be used to create distributed collaborative organizations that use the blockchain to give members specific rights within the organization. Many potential applications of this have been presented such as a distributed renewable power network that tracks contributions and usage proposed by former FCC Chaiman, Reed Hundt.

This mechanism potentially offers the ability for governance of all types to be handled in a more distributed fashion. In addition, it reduces the need for third-party guarantors, like rating agencies, which have proven to be unreliable in the wake of the 2008 financial crisis. There are certainly concerns that are raised over the use of complex algorithms to handle governance tasks, but the potential improvements certainly seem worth the risks.